Philanthropy in a Neoliberal Age II: Katz on Callahan’s THE GIVERS

THE GIVERS is one of the most useful and readable books recently published on the topic of philanthropy. It is especially well-informed on both the institutions and individuals who compose the new world of mega-philanthropy, which is the actual subject addressed in the book. This should come as no surprise, given the background of its author. David Callahan earned a Princeton PhD in the field of Politics (our version of what is usually called “political science” in the academy), writing his dissertation on post-Cold War national security doctrine. He first worked for what is now called the Century Foundation, a liberal think tank created by the Boston philanthropist Edward Filene a century ago, and then became one of the founders of another leading liberal think tank, Demos.

More recently Callahan has turned to journalism, as the founder and editor of the online philanthropic news and commentary service, Inside Philanthropy. His new book (he has previously published seven volumes of political theory, political commentary and current history) is based upon the reporting that he and his staff have done over the past several years for Inside Philanthropy. THE GIVERS is at the same time both a fine piece of philanthropy journalism and a political scientist’s theoretical commentary on the relationship between philanthropy and democracy in recent U.S. history.

Several reviewers, both on HistPhil and elsewhere, have commented on Callahan’s solid coverage of the mega-philanthropists, and I have little to add on the subject, apart from saying that THE GIVERS provides the most comprehensive and reliable treatment of the topic. Critics of the book may disagree with particular statements of fact or judgments as to individuals or philanthropic organizations, but surely no other recent publication is so generally well-informed both as to substance and judgment. Callahan knows what he is talking about, and his judgment is generally careful and fair. Indeed, one of the shortcomings of the book from my point of view is that Callahan tries too hard to be fair to individual philanthropists, thus depriving reader of his considered judgments. Nevertheless, this book is the place to start for anyone wanting to know what is happening in the upper reaches of personal philanthropy in the contemporary United States.

What interests me most in the book, and strikes me as problematic, is Callahan’s analytical point of view, which is not entirely easy to specify. As one might expect from a son of the estimable Daniel Callahan, founder of the Hastings Center on bioethics, and a scholar associated with distinguished center-left think tanks, David Callahan is politically liberal, very much a Demos voice. This means, in particular, that he is quite sensitive to the problem of growing inequality in American life, and to the emerging sense among the citizenry that they are being deprived of their rightful role in the governance of our democracy – this is the dilemma of the “demos” in America, now more than ever. Callahan’s point of view reflects the statement of purpose on the Demos website:

“Our nation’s highest challenge is to create a democracy that truly empowers people of all backgrounds, so that we all have a say in setting the policies that shape opportunity and provide for our common future. To help America meet that challenge, Demos is working to reduce both political and economic inequality…”

The question Callahan poses in THE GIVERS is how the emergence of the new philanthropists and of the institution of mega-philanthropy impact the current promise of democracy in the United States?

This poses a problem for Callahan, who admires plutocratic generosity, but recognizes the challenge that mega-giving constitutes for democratic governance. It forces him to walk a fine line between criticism and acceptance, since his political take is that Americans “face a future in which private donors – who are accountable to no one – may often wield more influence than elected public officials, who (in theory, anyway) are accountable to all of us.” This group constitutes “a heterogeneous new power elite” who “are becoming more powerful while ordinary Americans struggle to get their voices heard at all.” Yet (and this is the other side of the coin), these plutocrats are good at things that democracies are not ordinarily so good at: He argues that “today’s philanthropists are zeroing in on precisely those problems that our political system has fumbled or shyed [sic] away from. We need people with big plans, a drive to make a difference, and the money and power to do so, even if they sometimes get behind bad ideas.” They need to provide what Warren Buffett has call “society’s risk capital.”

And this is why, Callahan believes, philanthropy may provide “society’s passing gear.” But here, again, Callahan covers his bets. He doesn’t think that the mega-philanthropists will make mistakes or serve their own interests, but worries that “their rising power will further push ordinary Americans to the margins of civic life in an unequal era when so many people already feel shoved aside by elites and the wealthy.” Here Callahan invokes C. Wright Mills. I will come back to this point later, but of course Mills would not have stomached Callahan’s “on the one hand, and on the other” use of his social power analysis.

Callahan returns to this formulation at the very end of this long book. He says that “it is not far-fetched to think that the wealthy have executed a self-conscious power grab, first knocking out government and then taking charge of society using philanthropy as a tool.” But, he says, that is not the case, since the wealthy are focused on solving particular problems in practical ways. “Their engagement in policy and politics often comes reluctantly, with many steering clear of this area for fear of controversy.” They see government as a “partner not an enemy” so that many “believe in expanding government’s role.” “There is no plutocratic plot behind today’s big philanthropy,” Callahan contends, yet “we still have a problem: that an ever larger and richer upper class is amplifying its influence through large-scale giving in an era when it already has too much clout. Things are going to get worse, too.”

Apart from being naïve about the intentions of philanthropists as public policymakers, which I believe this critique is, it is also an instance of flawed political theory. At the very beginning of the book Callahan invokes the notion of civil society, which he contends “has become ever more dominated by the upper class.” While civil society “was a junior partner in the twentieth century relative to government and business, this is changing: Philanthropy is becoming a much stronger power center and, in some areas, is set to surpass government in its ability to shape society’s agenda.”

I think that a rigorous analysis of the role of civil society in relation to democracy would have helped Callahan explain the challenge posed by the new plutocrats, but the concept of civil society disappears after the opening chapters of THE GIVERS. What Callahan therefore misses is the relationship of civil society to the state (and the market), which would show that the real change for democracy is not so much the power of the donor class as the overall power of money in the political process. After Citizens United, the problem is not just money so much as “dark,” unaccountable money. Donors can now take advantage of the increasingly money-driven political system, and they are doing just that. This is the underlying reason why the demoi have lost control of politics, and it hard for me to see why any liberal should be as sanguine as David Callahan in contemplation of this threatening situation.

Finally, and here Mills’ class analysis would have helped Callahan, the problem is to understand not that government is being “starved” of financial resources, but to interrogate the reasons why government is underfunded. My own understanding is that the larger context for the current assault on the role of government in the United States is a combination of the triumph of neo-liberal political economics starting in the Reagan Revolution, with the resurgence of historically traditional American anti-statism that can be traced back to the Anti-Federalists in the New Republic, more than two centuries ago. The Tea Party has its conceptual origins in the fear of the British state that caused the American Revolution. Anti-statism is as American as apple pie.

Thus I think that our current dire political situation is the product of both traditional American anti-statism and a very different and deliberate assault on the state by plutocrats. We do not have so many billionaires, and thus mega-foundations, because we now have a larger and more adept entrepreneurial class, but because the structure of (mostly federal) economic policy has been captured by people of wealth, who have rewritten the laws to enable themselves to become extraordinarily rich. Thomas Piketty has laid out this story in a convincing manner, and I think he is correct in his analysis.

If there is any truth to this analysis, then it seems to me that the new plutocrats are in fact the problem, and they are quite unlikely to be part of the solution, as Callahan contends. Even accepting Callahan’s favorable account of many mega-philanthropic programs, how could they possibly cumulate to produce acceptable national policy on major issues? More important, if, as Callahan argues, the American demoi have been disempowered, how are they to recover their necessary role in democratic governance? Callahan senses this dilemma, and at the very end of the book, after suggesting some unlikely and probably ineffective reforms, he says that the only hope is that the plutocrats will become “mindful.” He admits that the reforms he advocates will not solve the problem, so “the best we can hope for is that funders bring greater self-restraint . . . to giving that affects the lives of their fellow citizens.”

Somehow that is just not enough to give me hope that THE GIVERS will save (or even preserve) democracy.

-Stanley N. Katz

A co-founder of HistPhil, Stanley N. Katz is Lecturer with rank of Professor in Public and International Affairs and Director of the Center for Arts and Cultural Policy Studies at Princeton University. He is President Emeritus of the American Council of Learned Societies, the national humanities organization in the United States.

2 thoughts on “Philanthropy in a Neoliberal Age II: Katz on Callahan’s THE GIVERS”

I appreciate this thoughtful review of my book by a scholar of Stan Katz’s stature and knowledge. He rightly captures that I’m hardly of one mind about wealthy philanthropists. Among the reasons I find this terrain so tricky is that — previous to founding Inside Philanthropy — I spent much of my career pushing for greater equity in U.S. society with support from foundations and major donors. Over the past twenty years, I’ve seen first-hand how much of the pushback to rising economic and political inequality that has occurred from civil society has been bankrolled by philanthropy — including some new donors, a story I tell in the book.

That said, I think Stan misstates how much hope I have for the success of philanthropy-fueled challenges to inequality. As I say in the book in several places, the wealthy donor class as a whole has very little interest in challenging an economic status quo where they have thrived. Mega-donors like Herb Sandler who prioritize fighting economic inequality are relatively scarce. Many top donors who lean left focus instead on environmental and social issues.

Meanwhile, as I detail in the book, conservative philanthropists have given billions to promote ideas that have exacerbated inequality. This giving has helped fuel and channel the antistatism that runs so deeply in American life, as Stan points out. I note often in the book the key role that conservative philanthropy has played in advancing a sweeping attack on the state over the past four decades.

Contrary to what Stan suggests, I think my book also clearly situates activist philanthropy within the larger context of money in politics. I point out again and again how the wealthy are using their “charitable” giving as part of a larger suite of tools for influence, starting with political contributions to Super PACs, ballot initiatives, etc. A key theme of the book is that philanthropy is just one more way that the upper class is converting their wealth into influence and all this is part of a broader trend whereby economic inequality is translating into civic inequality.

Stan says that, at the end of the book, I suggest “that the only hope is that the plutocrats will become “mindful.”

This is indeed important. But at the very, very end of the book, I also issue a broad call for better financing government with more progressive taxation, taking steps to expand the electorate and limit the role of money in politics, and enacting policies that would ensure that labor gets its fair share of the nation’s economic prosperity. Ultimately, I argue, less inequality and a stronger state is the key to containing the influence of the new mega-donors.

Am way behind because of a number of factors but I did want to tell you I read your review of Callahanâs book, which I have yet to read, and thought you were spot on. One additional thought about what may come to pass in the years immediately ahead. I think there is a good chance that increasing amounts of charitable dollars will in fact start to go to existing nonprofits who are working in the social justice arena rather than going to efforts to develop and impose new solutions to old problems with a top down approach. The plutocratic class donât get it because they want to control what will happen when in fact the âpeopleâ out there, both on the right and the left, are increasingly demanding that their institutions, the nonprofits they control, are the proper vehicles for effecting change in an time when they can no longer count on the political process to hear their voices. Until we get repeal of Citizens United, these people donât have much faith, understandably, in the possibility of capturing the political system in order to institute change but they do see how their organizations if properly funded could bring about the changes so desperately needed.

The Times this morning reports on Jeff Bezosâ twitter asking for ideas about how to spend his billions. He wants results, always these guys want measureable impact, but they are not yet focusing on the fact that their peers who have been pouring hundreds of millions into top down reform efforts havenât achieved their goals—with the exception of some quite specific medical research areas. Now is the moment to try to educate Bezos and wife! And who better to do it than some Princeton types!!!